Union government is taking various disinvestment plans to get rid of fiscal burdens.
Lack of transparency in operations of PSUs hinders the disinvestment plans.
What are the process involving in disinvestment?
The disinvestment programme of the public sector units usually made through
Market sales - This a direct sale method, where PSUs returns capital to the Union government through buyback offer.
New listings - This method involves sales through stock markets, by which IPOs for various companies are announced.
Strategic sales - This is through giving up shareholdings of the PSU companies which needs to be disinvested.
What are the concerns with this disinvestment programme?
The disinvestment measures stated were made possible, with a certain effort from the government.
But the disclosures by the PSUs for their IPOs lack sufficient company level data on segment wise revenues, products, clients and key data on costs and profits.
This attitude of withholding information is not helping as the competing private entities and listed companies disclose their operations.
What changes are needed to improve ratings of the PSUs?
Union government has to learn from the private sector firms, which prepare for the debut with corporate campaigns and multi media advertising before IPOs.
Before disinvestments the head of the PSUs should make media appearances presenting the prospectus and vision of the organisation.
The offering window has to be extended to ensure the prospective investors have time to study the PSUs and make the purchase.
The timing for IPOs also has to be worked out such that the PSUs profits are rising and it is presented positively.
